A Successful Quest to Bend the Cost Curve

Dec 13, 2010

"This is one of the most exciting projects in terms of results," said IHI President and CEO Maureen Bisognano about the QUEST®: High Performing Hospitals national collaborative.

By comparing performance and sharing best practices, 157 charter hospitals in the QUEST national collaborative have saved more than 22,000 lives in two years-and reduced healthcare spending by $2.13 billion.

"If all hospitals in the United States could achieve these two-year results, it would result in an additional $22.6 billion saved annually," said Susan DeVore, president and CEO, Premier healthcare alliance, which spearheaded and oversees QUEST.

She estimates that this dollar amount would fund:

156,000 new primary care physicians

418,000 nurses

All electronic health records nationwide

QUEST hospitals are achieving the widely lauded goal of "bending the healthcare cost curve," says DeVore. She points to national costs for inpatient care, which increased by 14 percent between third-quarter 2006 and 2009.

During this same time period, QUEST hospitals saw their case-mix-adjusted cost per discharge increase by only 8 percent-or 2 percent when adjusted for inflation. QUEST hospitals are saving an average of $603 dollars per discharge. The group's average cost-per-adjusted discharge has decreased from a baseline of $5,895 to $5,278.

At the same time, QUEST hospitals are improving quality. Mortality rates among QUEST participants have declined 23 percent since the baseline, with largest gains achieved in the area of sepsis. More than 3,000 lives have been saved at QUEST hospitals due to improvements made in sepsis identification and treatment. (Read how one hospital is improving sepsis mortality.) QUEST hospitals have also reduced morality related to respiratory infections and cardiac care.

"This is a real demonstration that local change can happen that has national implications," says Bisognano.

Measure, Compare, Improve

QUEST includes urban/rural, large/small, and teaching/nonteaching facilities from 34 states, including many safety net hospitals. The collaborative aims to measure and improve hospital performance in five areas:

Mortality ratio (i.e., hospital-level, risk-adjusted mortality)

Cost of care (i.e., total inpatient cost per case-mix-index-adjusted discharge)

QUEST hospitals have been working to measure and improve the first three measures (mortality, cost, and evidence-based care) for two years. Performance improvement around the last two measures (patient experience and harm avoidance) just began.

Hospitals in QUEST work together to:

Identify main drivers that lead to deaths, medical errors, improved patient experience, and excessive costs

Target improvement opportunities in these areas

Compare themselves against each other

Measure progress

Share best practices to significantly improve outcomes

QUEST hospitals have access to a large comparative database to help identify opportunities for benchmarking and improvement. They also have a variety of opportunities-from educational phone calls to national meetings-to share ideas and encourage the spread of best practices. In addition, IHI has developed "change packets" that guide frontline clinicians in improving specific aspects of care, such as reducing ventilator-associated pneumonia.

Cost Drivers

Two primary cost-reduction strategies were pursued by QUEST hospitals in the first two years of the initiative: increasing labor productivity and reducing supply costs.

However, the biggest cost drivers differ by type of hospital. For example, supply expenses have declined markedly for large, community hospitals, but have not budged for small, community hospitals. Because of their size and scale, larger institutions have an easier time negotiating lower supply prices, theorizes DeVore.

Small teaching hospitals made the biggest reductions (-6.8 percent) in total expenses, followed closely by large, nonteaching hospitals (-6.4% percent). Small, nonteaching hospitals actually increased cost by 1.4 percent. Large teaching hospitals fell in the middle with cost reductions of -3.7 percent.

Evidence-Based Care

QUEST also provides proof that improving quality positively impacts costs-at least for the U.S. healthcare system as a whole, said DeVore. Data on all QUEST hospitals show that, as evidence-based care rates rise, both mortality and costs decline.

Similarly, as mortality falls, costs decline. "This is important for policy discussions," said DeVore. For payers such as Medicare, which look at performance and costs across all hospitals, this shows that policies incenting improved adherence to the evidence-base care should simultaneously reduce costs and mortalities, she explained.

However, more research is needed to understand the connections between quality improvement and cost reduction on an individual hospital-by-hospital basis, said DeVore.

Why QUEST Is Working?

Maureen Bisognano, president and CEO, Institute for Healthcare Improvement (IHI), cites three reasons why the QUEST® initiative has been successful in helping hospitals improve quality and reduce costs.

Building will. QUEST is building will by putting performance data in front of teams, says Bisognano. "What you see in QUEST is people looking at data very differently," she says.

When Bisognano meets with senior leadership teams around the country, she is often asked three questions:

How are we doing?

How do we compare to the best?

What is our rate of improvement over time?

"A lot of hospitals don't have the type of performance data that the QUEST project supports. They don't know where they stand on any given day," says Bisognano. "What QUEST is doing is feeding the performance data to leadership teams and showing them where their organizations stand in relation to the best in the QUEST system."

News ideas/models for care. The sharing of performance data spurs a lot of discussion around the senior leadership tables, says Bisognano. "People are asking, 'What do we look like? How are our patients different? How do we close that gap?' Then they begin to seek out different models of care."

Hospitals in QUEST participate in learning communities that enable the sharing of ideas and testing of new models of care across organizations. "A sense of momentum is building across all the QUEST hospitals," says Bisognano. "Each hospital does not necessarily have to make each improvement independently."

Exquisite execution focus. QUEST drives execution-or change-at two levels: senior leaders and front line clinicians, says Bisognano. "Senior leaders from different QUEST hospitals are sharing examples of leadership behaviors that are driving change throughout organizations. Examples would be safety rounds and creating a Lean culture aimed at driving out waste."

At the frontline level, physicians, nurses, and other clinicians are provided with "change packets," developed by IHI. These packets spell out specific changes that, for example, an ICU needs to make to eliminate ventilator-associated pneumonia, or that an operating room team needs to make to eliminate post-surgical infections, she says.

"The power of the QUEST collaborative lies in making the data visible, showing the gaps in performance, and helping organizational leaders and staff execute new ideas and models for care," says Bisognano.

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